Illinois Route 53/120

Transcription

1 Illinois Route 53/120 Feasibility Analysis March 2015 Finance Committee Final Report and Recommendations

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3 Preface Final Voting Record The official voting record of the Finance Committee s decision to approve the Final Report and Recommendations is below. Votes were cast in-person at the Finance Committee s final meeting on March 12, Final Voting Record Vote Name/ Representing Vote Name/ Representing Yes Aaron Lawlor, Lake County Yes Dave Brown, Village of Vernon Hills Yes Jeffrey Braiman, Village of Buffalo Grove Yes Burnell Russell, Village of Volo Yes Michael Ellis, Village of Grayslake Yes Frank Bart, Village of Wauconda Yes Stephen Park, Village of Gurnee Yes Wayne Motley, City of Waukegan Yes Linda Soto, Village of Hainesville Yes John Yonan, Cook County Department of Transportation and Highways No Joseph Mancino, Village of Hawthorn Woods Yes Charles Witherington-Perkins, Village of Arlington Heights Yes Mike Talbett, Village of Kildeer Yes Jim Heisler, McHenry County Yes Tom Poynton, Village of Lake Zurich Yes David Stolman, BRAC Founding Co-Chair Yes Matt Dabrowski, Village of Lakemoor Yes Brad Leibov, Liberty Prairie Foundation Yes Terry Weppler, Village of Libertyville Yes Michael Stevens, Lake County Partners Yes Steve Lentz, Village of Mundelein Yes Marty Buehler, Lake County Transportation Alliance No George Monaco, Village of Round Lake George Ranney, Co-Chair, BRAC Recuse Angie Underwood, Village of Long Grove Abstain Linda Lucassen, Village of Round Lake Park Abstain A motion was made by Aaron Lawlor, Lake County and seconded by David Stolman, BRAC Founding Co-Chair to finalize and adopt the final report as drafted and to submit the report for the Tollway Board s consideration. Team Acknowledgements The Illinois Tollway worked in partnership with the Chicago Metropolitan Agency for Planning (CMAP) and the Lake County Division of Transportation in implementing the work of the Finance Committee. In addition to Tollway consultants TranSystems, Christopher B. Burke Engineering, and Parsons Brinckerhoff, others also assisted in the Committee s work, including Public Financial Management, AECOM, and CDM Smith.

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5 Table of Contents Finance Committee Final Report and Recommendations Volume 1 Executive Summary Background and Introduction Finance Committee Process Project History: A brief look back at how we got here Need for Project: Why it is important to work together A New Look at Project Benefits Market Demand Congestion Relief Travel Time Savings Assessing Project Scope and Cost BRAC Design Standards BRAC Environmental Performance Standards BRAC Proposed Environmental Restoration and Stewardship Fund Establishing the Project Funding Gap Finance Committee: Funding Options and Findings First Understanding the Landscape: Financial Realties A Good Starting Point: BRAC Proposed Funding Options Digging into Details: Finance Committee Working Groups Tolling Options along Illinois Route 53/ Tolling Strategies along I-94 in Lake County Combined Effect of Tolling Strategies for Illinois Route 53/120 and for I Financing Options Lake County Motor Fuel Tax Value Capture Compilation of Working Group Findings...36 Finance Recommendations Final Recommendation Innovative Local Contribution Local Support for Innovative Tolling Strategies State Contribution is Essential Seek Federal Funding Allocation of Funding A Financially Sustainable Tollway System Legislative Action Required Continued Stakeholder Commitment and Involvement Required...43 Conclusion...45 Attachment A...47 Attachment B...51 Volume 2 Appendix A Finance Committee Meetings Appendix B Lake County Tolling and Motor Fuel Tax Working Group Appendix C Value Capture Working Group Appendix D Environmental Restoration and Stewardship Fund Working Group Appendix E User Survey Report

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7 Executive Summary The proposed Illinois Route 53/120 project offers the opportunity to dramatically improve mobility for people and businesses and to grow the economies of Lake County communities and the entire region. The Chicago Metropolitan Agency for Planning (CMAP) in the GO TO 2040 Regional Comprehensive Plan ranked this project the highest among all priority projects in its effect on region wide congestion. However, for several decades, it has been impossible to create broad consensus behind the project because of different perceptions about whether the benefits of an Illinois Route 53/120 project would be outweighed by the negative impacts to local communities and to the unique natural resources of the area. For the first time, thanks to the pivotal work of the Blue Ribbon Advisory Council (BRAC), there is now broad consensus about the parameters under which this project could proceed and have the support of a wide spectrum of people and organizations that care about Lake County s future. This strategic project is closer than it ever has been to being implemented. The next phase of moving this project forward has been proceeding through the work of two committees the Finance Committee and the Land Use Committee. The Finance Committee was formed and tasked to determine the project s financial feasibility and to develop a recommendation to the Illinois Tollway Board concerning how the project could be funded. Based on the Tollway s Feasibility Analysis, the project is estimated to cost between $2.3 billion to $2.65 billion. The revenues from the road itself are expected to support $250 million to $330 million in bonding capacity to support the cost of the road (all dollar values expressed in year 2020 dollars). Understanding the realities of existing funding sources, the Finance Committee recognizes that a successful financial plan for the Illinois Route 53/120 project must rely on a variety of funding sources, including new revenue streams. Consequently, the Finance Committee supports and recommends the following funding tools for the project: Value Capture: This method involves the creation of a new and innovative funding mechanism (the Sustainable Transportation Fund) that would collect 25 percent of the increase in real estate tax revenue from parcels of land close to the road developed for non-residential purposes upon the project s adoption in an official Tollway capital plan. The revenue would be directed to the Environmental Restoration and Stewardship Fund that is an integral part of the BRAC s recommendation for the project. ($81 million - $108 million, 2020 dollars in net present value) Finance Committee Final Report and Recommendations 7

8 County Motor Fuel Tax: Lake County should be added to the group of Illinois counties that already have a state administered four cents per gallon county option fuel tax. Lake County would commit 50 percent of revenues from this funding source to the Illinois Route 53/120 project, while the other 50 percent would be committed to other transportation priorities in Lake County with the highest priority being the U.S. Route 41 corridor as identified in the Lake County Consensus Plan. ($34 million - $45 million, 2020 dollars in bonding capacity) Innovative Tolling Strategies: Indexing and congestion pricing of tolls are strategies recommended for the proposed road as a pilot for eventual implementation along the entire Tollway system. Also, restructuring tolls along I-94 in Lake County is recommended in order to raise revenues for the project, to improve tolling equity, and to mitigate and minimize diversion onto local roads. ($380 million - $510 million, 2020 dollars in bonding capacity) State Commitments: The Committee recommends that the project be delineated as a priority in future state capital bills and that the Illinois Department of Transportation (IDOT) complete all future needed land acquisition and ensure that land already acquired by IDOT be dedicated to the project in recognition of the project s benefit to the state s economy. Tollway System Commitments: The Committee recommends that the project be identified as the Tollway s next top priority for new projects beyond the Tollway s current Move Illinois Program, and that the Tollway should evaluate system revenues needed to both fully fund this project and maintain a financially sustainable Tollway system. In total, along with the base tolls from the road itself, the recommended funding options are estimated to generate between $745 million to $993 million to fund the project (2020 dollars). This leaves a funding gap of $1.36 billion to $1.91 billion to be addressed through system toll revenues. The recommendations made by the Finance Committee come after the investment of a tremendous amount of time and energy by its diverse members which reflects the broad consensus that the BRAC was able to generate. The Finance Committee believes this report will continue to build momentum for the project. Yet, many challenges remain. The Finance Committee believes leaders of not only Lake County, but also the membership from the BRAC, Illinois Department of Transportation, and the Illinois Tollway will need to continue to focus on this project so that it stays at the forefront of legislative and political discussions. This Committee concludes its work recognizing that additional analysis and work beyond that of this Committee will bring greater definition to how these funding concepts could be feasibly enabled and 8 Finance Committee Final Report and Recommendations

9 effectively implemented. Further, the Committee encourages the Tollway to recognize the need for completion of the Corridor Land Use Plan and a Phase One Engineering and Environmental analysis to more comprehensively examine issues of roadway alignment, access points, design, project impacts and mitigation prior to initiating construction. Finance Committee Final Report and Recommendations 9

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11 Section 1.0 Background and Introduction An Illinois Route 53 northern extension has been considered since the 1960s. However, due to the lack of consensus among various interests, the project has not yet come to fruition. In 2011, the Illinois Tollway ( Tollway ) initiated a unique planning process and created a Blue Ribbon Advisory Council (BRAC) to establish a program for a road that would lead to consensus on whether the Tollway should move forward with the project. In a remarkably cooperative and creative process, the BRAC successfully developed that framework which led to the adoption of the June 2012 Resolution and Summary Report (BRAC Report). The BRAC recommendations lay out a blueprint for the extension to be a 21 st Century modern boulevard with design and environmental requirements that will protect the natural environment while preserving the character of Lake County. This represented a significant shift in how the County and State envision meeting Lake County s transportation needs. Next steps outlined by the BRAC included the development of a corridor land use plan as well as a detailed financial plan in coordination with local governments. As a result, a Land Use Committee (led by the Chicago Metropolitan Agency for Planning, CMAP ) and a Finance Committee (led by the Tollway) were formed. Section 2.0 Finance Committee Process In October 2013, the Illinois Route 53/120 Finance Committee was formed and tasked to determine the project s financial feasibility and to develop a recommendation to the Tollway Board concerning how the project could be funded. The committee was composed of county and local elected officials as well as representatives of local stakeholders (Table 1). The Finance Committee builds from the final recommendations of the BRAC as captured in the BRAC Report, recognizing its call for an innovative funding plan for an innovative road. Technical analysis and research required by the Finance Committee to help inform decision making were conducted through the Tollway s Illinois Route 53/120 Feasibility Analysis consultants. As part of the Tollway s Feasibility Analysis, a concept level cost refinement was provided to the Finance Committee to confirm the major project elements and the total project cost. Also, the Tollway developed new toll revenue forecasts and bonding capacity estimates so the Committee could identify the project funding gap that needed to be addressed. These findings formed the basis for establishing three working groups to efficiently focus on topics that warranted more in-depth analysis and discussion. These working groups were: Lake County Tolling and Motor Fuel Tax, Value Capture, and Environmental Restoration and Stewardship Fund. In total, the Finance Committee and its working groups convened in over 20 meetings to evaluate a broad spectrum of funding options to better define how options might function, and to develop a viable package of funding recommendations for the Tollway Board s consideration. Details of each of the Committee and working group meetings can be found in Appendices A-D. Finance Committee Final Report and Recommendations 11

12 To ensure an open, transparent and inclusive process, meetings of the Finance Committee and its working groups were all conducted in accordance with the Open Meetings Act and a time for public comment was made at the end of each meeting. The public was made aware of all meetings in advance, and minutes and presentations were made available on the Tollway s website. 12 Finance Committee Final Report and Recommendations

13 Table 1: Finance Committee Membership Representing Name Alternate Working Group Member Co-Chair Chris Meister * Co-Chair Doug Whitley * Lake County Aaron Lawlor T,V,E Co-Chair, BRAC George Ranney Jim LaBelle Metropolis Strategies E Village of Arlington Heights Tom Hayes Charles Witherington-Perkins V Village of Buffalo Grove Jeffrey Braiman Jeffrey Berman V Village of Grayslake Michael Ellis V Village of Gurnee Stephen Park T Village of Hainesville Linda Soto Al Maiden Village of Hawthorn Woods Joseph Mancino V Village of Kildeer Mike Talbett E Village of Lake Zurich Tom Poynton V Village of Lakemoor Todd Weihofen Matt Dabrowski Village of Libertyville Terry Weppler Heather Rowe V Village of Long Grove Angie Underwood Joseph Barry / David Lothspeich E Village of Mundelein Steve Lentz Dawn Abernathy V Village of Palatine Jim Schwantz Village of Round Lake George Monaco Dan MacGillis T Village of Round Lake Park Linda Lucassen Village of Vernon Hills Roger Byrne Dave Brown E Village of Volo Burnell Russell Eric Tison T Village of Wauconda Frank Bart Doug Maxeiner City of Rolling Meadows Tom Rooney Barry Krumstock City of Waukegan Wayne Motley Noelle Kischer-Lepper V Cook County Department of Transportation and John Yonan Jennifer Killen / Mike Highways Streitmatter T McHenry County Jim Heisler T BRAC Founding Co-Chair David Stolman T Liberty Prairie Foundation Brad Leibov E Lake County Partners Michael Stevens V Lake County Transportation Alliance Marty Buehler Suzanne Zupec T Illinois Department of Transportation Erica Borggren * Tony Small * T Federal Highway Administration Robin Helmerichs * Mike Hine * T T = Lake County Tolling and Motor Fuel Tax Working Group V = Value Capture Working Group E = Environmental Stewardship Fund Working Group * = Non-Voting Member Finance Committee Final Report and Recommendations 13

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15 Section 3.0 Project History: A brief look back at how we got here The need for an improved transportation system in Lake County has been part of transportation planning efforts for northeastern Illinois dating back to 1962, when regional plans first identified the Lake-Will Expressway as a north-south circumferential interstate route. The north section of this route from Lake Cook Road to Interstate 94 has more recently come to be known as the Illinois Route 53/120 project in Lake County. These planning efforts stalled in the past due to funding challenges and lack of consensus. However, with continuing development in Lake County, and in particular central Lake County, as well as overall growth in the northeast Illinois region, traffic congestion continues to worsen. That has compelled local and regional leaders to concentrate even more on the extension of Illinois Route 53 into Lake County combined with the improvement of traffic capacity along the east-west Illinois Route 120 corridor. The key elements of these planning efforts are summarized below: Late 1960s Construction of Illinois Route 53 up to Dundee Road to 1990 Two environmental studies of the north extension initiated but discontinued. The Illinois Department of Transportation (IDOT) begin purchasing property for the proposed route. Approximately 65 percent of the needed right-of-way is currently owned by the State of Illinois. Late 1980s Construction of Illinois Route 53 from Dundee Road to Lake Cook Road to 2001 A Draft Environmental Impact Statement (DEIS) was prepared as a joint effort by IDOT and the Tollway, referred to as the Lake County Transportation Improvement Project (LCTIP). The LCTIP completed a county-wide needs assessment, with two finalist alternatives emerging (Illinois 83/U.S. Route 45/U.S. Route 12 and Illinois Route 53 highway extension). The DEIS was presented at a Public Hearing in 2001, but the project did not advance further due to a lack of consensus Lake County officials establish the Route 120 Corridor Planning Council (CPC), which developed the Illinois Route 120 Unified Vision Plan which included a four-lane boulevard as the preferred design. The plan recognized the possibility of the Illinois Route 53 extension moving forward and recommended an access controlled roadway along the Illinois Route 120 corridor, if that occurred. Finance Committee Final Report and Recommendations 15

16 2009 With increasing travel demand and congestion, and with concern that congestion was at or approaching economically damaging levels, Lake County included an advisory referendum in April asking if voters would support the extension of Illinois Route 53 to central Lake County. Nearly 76 percent of the voters supported that advisory referendum The Chicago Metropolitan Agency for Planning (CMAP) identified the Illinois Route 53 extension and Illinois Route 120 improvements as a priority transportation project in the GO TO 2040 Comprehensive Regional Plan The Tollway created the BRAC to establish a program for a road that would lead to broad consensus on whether the Tollway should move forward with the project. The BRAC issued their Resolution and Summary Report in June 2012, which laid out a blueprint for a 21 st Century modern boulevard with design and enviromental requirements that will enable the road to meet the County s transportation needs while protecting the natural environment and preserving the community character of Lake County. Next steps outlined by the BRAC included the development of a corridor land use plan as well as a detailed financial plan in coordination with local governments Building on the recommendations in the BRAC Resolution and Summary Report, the Tollway and CMAP initiated a project Feasibility Analysis and Corridor Land Use Plan, respectively To provide guidance to the Tollway and CMAP in their efforts, a Finance Committee and a Land Use Committee were formed to provide a recommendation to the Illinois Tollway Board of Directors as to whether the Tollway should continue to move forward with the project. While challenges remain, the combination of an unprecedented degree of collaboration and creative thinking about the nature of the road system has brought the vision of the Illinois Route 53/120 project closer to realization than ever before. 16 Finance Committee Final Report and Recommendations

17 Section 4.0 Need for Project: Why it is important to work together Since the transportation planning efforts for an Illinois Route 53/120 project began in the 1960s, the population in Lake County has almost doubled, and it is projected to increase an additional 30 percent by the year 2040 (Table 2). Employment within Lake County has also experienced a similar increase over the years and is projected to increase an additional 28 percent by the year 2040 (Table 3). Table 2: Lake County Population Statistics Year Population 1 % Increase , ,000 35% ,000 36% ,000 30% 1 Source: US Census Bureau Data; CMAP GO TO 2040 (updated 2014). Rounded to nearest 1,000. Table 3: Lake County Employment Statistics Year Employment 1 % Increase , ,000 97% ,000 38% ,000 28% 1 Source: US Census Bureau Data; CMAP GO TO 2040 (updated 2014). Rounded to nearest 1,000. As a result of this growth, travel demand in Lake County has also increased, well outpacing transportation improvements in Lake County. Traffic congestion in Lake County has become significant in many locations, particularly in the central part of the County. Congestion is no more evident than at the southern border of Lake County where about 100,000 vehicles each week day use existing Illinois Route 53. Finance Committee Final Report and Recommendations 17

18 Recognizing the need to alleviate congestion in this part of the region, CMAP included the Illinois Route 53/120 project in the GO TO 2040 Plan as one of five new Priority Capital Projects. The GO TO 2040 Plan indicates that of all the capital projects considered, the Illinois Route 53/120 project would have the highest congestion reduction benefits and the largest economic impacts in the region. Lake County government has also placed great emphasis on the Illinois Route 53/120 project. Two of the primary goals of the Lake County Board s Strategic Plan of 2013 were enhancing economic opportunities along with reducing congestion and improving transportation 1. Lake County s 2040 Transportation Plan, adopted by its Board in June 2014, includes the Illinois Route 53/120 project as part of the baseline of improvements, in line with GO TO As shown in Figure 1, if the Illinois Route 53/120 project is not completed by 2040, nearly half of the major roadways in the county will be deficient, indicating a strong need for additional northsouth capacity, and additional capacity along east-west corridors such as Illinois Route From Lake County website lake-county-strategic-plan-progress-report/ 18 Finance Committee Final Report and Recommendations

19 Figure 1: Lake County Traffic Congestion Deficient Roads in 2040 if Illinois Route 53/120 is Not Completed Based on Lake County 2040 Transportation Plan Model Deficient Roads classified by means of an index that considered level of service, volume-to-capacity ratios and travel desire ANTIOCH N Kilbourne Rd Rd Sheridan m L e w i s Av e Av e N 21st St ZION 33rd St BEACH PARK N Delan y Rd LINDENHURST LAKE VILLA Cedar Lake Rd Grand Ave Yorkhouse Rd Sk N Lewis Ave Sand Lake Rd ok ie Hw Engle Dr y Grand Ave US Hig sr he Wadsworth Rd W Millburn Rd llin le WADSWORTH Grand Ave FOX LAKE th 21st St OLD MILL CREEK W Petite Lake Rd W Monaville Rd WINTHROP HARBOR Be IL Route 173 Sheridan Rd Beck Rd Miller Rd W Gelden Rd UNINCORPORATED N S t a t e Pa r k R d Mill Creek Rd S a va g e R d N Deep Lake Rd Rd IL Rou te US Highway 41 IL Route 83 s Lake Rd W IL Route 173 W Gras 9th St Green Bay Source: Lake County 2040 Transportation Plan Ro Kenosha Rd Edwards Rd Cra wford Rd N L a k e Av e North Ave Beach Grove Rd Deficient Roadway Segment Non-Deficient Roadway Segment Russell Rd W Wilmot Rd Sunset Ave d Rollins hw ROUND LAKE HEIGHTS Go lf Grand Ave Rd Rd ay IL Ro THIRD LAKE Washington St ilm d eld R er ilton Rd WM Rd METTAWA W IL Route 60 Townline Rd N US Highway 12 Riverwoods Rd IL Route 83 Rd n ia th lo id nd Rd Saunders Rd Quentin Rd Kelsey Rd M Weila e St Genese Sheridan Rd Rd ve Arlington Heights Rd N DEERFIELD an sa NORTHBROOK Deerfield Rd id hn WHEELING er Jo ARLINGTON HEIGHTS RIVERWOODS Deerfield Rd Sh int N Ela Rd 94 Deerfield Pkwy BUFFALO GROVE l Sa IL Route 59 3 tra wy Lake Cook Rd Cen HIGHLAND PARK ie H DEER PARK BANNOCKBURN Duffy Ln Skok Rd Long Grove Rd Rd nd an IL e5 Rd W Aptakisic Rd ut Ro erid ey Ra LINCOLNSHIRE LONG GROVE KILDEER Sh Vall BARRINGTON HILLS W County Line Rd BARRINGTON kie LAKE ZURICH HIGHWOOD Half Day Rd IL Route 22 E Main St W Cuba Rd y Sko Hw d n Rd st dr ega IL Route 22 Ran auk Old SW we Rd W Everett Rd e Ave rth nr y auke No He Milw W Mc 45 FOX RIVER GROVE Old ay Miller Rd LAKE BARRINGTON NORTH BARRINGTON HAWTHORN WOODS w Rd gh ey Hi ls INDIAN CREEK US Ke LAKE FOREST VERNON HILLS TOWER LAKES N N Skokie Hwy W Kennedy Rd PORT BARRINGTON Oak St N Ow Skokie Hwy Rd S Bu oe MUNDELEIN Wa u k e g a n R d d Rd kee Ave nh NG I va d ens R LAKE BLUFF Rockland Rd Rocklan Riverwoods Rd e N Saint Mar ys Rd Av tterfi Chevy Chase Rd W Hawley St IL Route 176 WAUCONDA L e w i s Av e 1 te 2 Rou rk Milwau N Rand Rd Pa ute Route Ro W IL e IL ISLAND LAKE Maple Av Oak Spring Rd LIBERTYVILLE Lake St Rd Bonner Rd GREEN OAKS r Rd Midlothian Rd ell Garland Rd ss N Fremont Center Rd Go Callahan Rd Wincheste y Rd d NORTH CHICAGO Green Ba er 14th St Martin Luther King Jr Dr Buckley Rd Peterson Rd Cas N Oplaine Rd N IL Route 83 N IL N Alleghan y Rd er R Harris Rd d Fish ell R Guerin Rd 41 Casey Rd ghway 7 ute Darr d 20 Fairfield Rd te US Hi Rou W IL Route Wa u k e g a n R d Center St ute W IL Belvidere Rd PARK CITY GRAYSLAKE St ROUND LAKEvidere Rd W Bel HAINESVILLE W IL Ro Neville Rd WAUKEGAN Grand Ave GURNEE N Almond Rd ain US Highway 45 EM Ro VOLO 3 IL St N Fish Lake Rd ur nb de an Rd Br k US Highway 12 sin g er Rd pp N Wilson Rd Ni Main e8 Washington St ROUND LAKE PARK Molidor Rd LAKEMOOR ut Hunt Club Rd 12 ROUND LAKE BEACH Big Hollow Rd Lake Cook Rd County Line Rd Finance Committee Final Report and Recommendations 19

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21 Section 5.0 A New Look at Project Benefits 5.1 Market Demand Given the unique nature of the BRAC recommendation which calls for a smaller capacity (four lane) and lower speed (45 miles per hour) tolled facility, many questioned the willingness of travelers to pay tolls to use the new road as well as the project s ability to effectively achieve its congestion relief and mobility goals. As a result, an early task in the Tollway s Feasibility Analysis was to conduct a user survey to gain feedback from potential users of the proposed roadway and to thereby establish an objective market assessment. Unlike public opinion polls where the objective of the survey is to assess a population s attitudes and beliefs, the user survey was a stated preference survey which assessed a consumer s preference when faced with constraints and trade-offs. In this case, the constraints and trade-offs were cost (tolls to use the road) and time (achieved travel time savings). The user survey yielded nearly 9,000 completed surveys which provided an indication of the travelers willingness to pay tolls and propensity to use the Illinois Route 53/120 Project (Appendix E). The results of the survey were integrated into CMAP s Pricing Model 2, validated to ensure replication of existing traffic count information in Lake County, to estimate future traffic and potential toll revenue for the proposed roadway. Based on this new analysis, travel demand models estimate that the 2040 maximum traffic volume is 62,000 vehicles a day, when assumed as a four lane, access controlled facility, with a 45...the survey results and forecast models indicate that travelers are indeed willing to pay to use the new road even if configured as a four-lane, 45 mph roadway... miles per hour (mph) speed limit, tolled at 20 cents per mile for passenger cars. In other words, the survey results and forecast models indicate that travelers are indeed willing to pay to use the new road even if configured as a four-lane, 45 mph roadway as proposed by the BRAC. The proven demand for this road results in congestion relief and travel time savings as discussed below. 2 Activity-Based Model for Highway Pricing Studies at CMAP, prepared by PB Americas for the Chicago Metropolitan Agency for Planning, October Finance Committee Final Report and Recommendations 21

22 5.2 Congestion Relief The project is expected to provide improved accessibility for central Lake County and improved mobility throughout the corridor. CMAP s GO TO 2040 Regional Comprehensive Plan ranked this project the highest among all priority projects in its effect on region wide congestion, reducing congested vehicle hours of travel by 64,000 hours daily on a regional basis. The project also has a significant benefit to local roads by reducing the number of congested vehicle hours in the corridor by 40,000 in Efforts through the Feasibility Analysis confirm extensive congestion relief on local roads throughout Lake County. 5.3 Travel Time Savings With regard to travel time savings, the Feasibility Analysis estimated future travel times for a sampling of origin-destination pairs. As seen in Table 4, under a future no-build scenario, travel times are expected to continue to climb due to continued population and employment growth. But in the scenarios where the Illinois Route 53/120 project is built, travel time reductions of up to 30 percent for some trips are realized. For example, in 2040, a trip from Grayslake to Schaumburg will drop from 98 minutes to 68 minutes due to the road, a savings of 31 percent. Table 4: Examples of Travel Time Savings Trip (Origin to Destination) 2040 No Build 2040 IL Route 53/120 Project (minutes) (minutes) Percent Reduction Grayslake to Schaumburg % Hainesville to Schaumburg % Waukegan to Arlington Heights % Mundelein to Schaumburg % Volo to Arlington Heights % 22 Finance Committee Final Report and Recommendations

23 Section 6.0 Assessing Project Scope and Cost For the purposes of cost estimation, the Feasibility Analysis assumed the scope of the project as that recommended by the BRAC (Figure 2). The project scope would include a new access controlled modern boulevard extending northward from the current terminus of Illinois Route 53 at Lake Cook Road through central Lake County to Illinois Route 120 extending from approximately U.S. Route 12 on the west to Interstate 94 on the east including a new bypass from Wilson Road to Almond Road, for a total project distance of approximately 25 miles. Figure 2: Project Location Map Based on the BRAC Resolution and Summary Report Finance Committee Final Report and Recommendations 23

24 The Feasibility Analysis developed new planning-level cost estimates by taking a clean-slate, bottom-up approach, basing cost estimates on quantities, refinement of assumptions, and eliminating some uncertainties that were inherent to earlier estimates (Table 5). Table 5: Illinois Route 53/120 Feasibility Analysis Cost Estimate Category Low High 1 Roadway $ 631 $ Structures $ 261 $ Traffic Management and Tolling $ 51 $ 74 4 Drainage $ 148 $ Environmental Mitigation $ 115 $ Contingency (30%) $ 362 $ Right-of-Way $ 225 $ Engineering $ 410 $ Utility Relocations $ 66 $ Environmental Restoration and Stewardship Fund $ 81 $ 81 TOTAL $ 2,350 $ 2,650 All values in million dollars (2020) Costs assume 5% annual escalation The current project cost estimate ranges from $2.35 billion to $2.65 billion. These costs represent the project s total capital costs, including unique design features as well as environmental elements and protections as recommended by the BRAC. The Finance Committee viewed the implementation of the BRAC recommendations, which are above and The current project cost estimate ranges from $2.35 billion to $2.65 billion. beyond current regulatory requirements, as critical to maintaining consensus on the project. These elements are estimated to cost $325 million to $400 million and are accounted for in the general cost categories in Table 5 along with the Environmental Restoration and Stewardship Fund. All cost estimates assume the mid-point of construction in 2020 dollars using an escalation rate of five percent annually. Also, a 30 percent contingency was used based on industry best practice 3. The cost estimates were developed giving careful consideration for all the elements needed to achieve the intent of the BRAC recommendations. As a result, the cost estimates were largely shaped by the following BRAC recommendations: 3 AASHTO s Practical Guide to Cost Estimating, 1 st Edition, Finance Committee Final Report and Recommendations

25 6.1 BRAC Design Standards The BRAC recommended design standards are intended to avoid or minimize negative environmental impacts, and promote environmental enhancements and sustainable practices in response to the unique project setting. A foundational element of the BRAC s design recommendations was that the road be a four-lane, 45 mph, limited access tolled facility. Additional BRAC design standards that shaped the scope of the project include: Enhance the experience of road users and buffer the local communities by depressing the roadway below natural grade where feasible, and adding berms and landscaping. Improve the connectivity of the regional bicycle and pedestrian trail networks by creating connections within the project corridor, provide connectivity between conservation lands, and prevent fragmentation of communities. Provide accommodations for transit, with the possibility for bus rapid transit in the future. 6.2 BRAC Environmental Performance Standards The BRAC provided a list of environmental performance standards with the goal of preserving, protecting and/or enhancing this unique environmental landscape, and minimizing impacts to adjacent properties. Additional environmental performance standards recommended in the BRAC Report include: Utilize stormwater management techniques that protect the water quality of local streams and water bodies by reducing stormwater runoff volume from the project site in innovative ways. Protect open space to reconnect fragmented ecosystems and prevent further fragmentation. Mitigate unavoidable wetland impacts at a ratio of at least 5:1. Minimize traffic noise by utilizing depressed roadways and berms where practical and feasible, and otherwise meeting the recommended noise abatement standards. Finance Committee Final Report and Recommendations 25

26 6.3 BRAC Proposed Environmental Restoration and Stewardship Fund Given the number of unique and threatened ecological resources in Lake County, the proposed Environmental Restoration and Stewardship Fund (ERSF) will provide financial support for the protection and enhancement of the natural resources, including agricultural lands and water bodies, within two miles of the Illinois Route 53/120 roadway. The ERSF will also support efforts to improve the ecological health within the corridor through: Protection and restoration of at least 750 acres of land Long-term stewardship of the current and newly protected lands and other natural resources, including agricultural lands and water bodies Innovative investments intended to remediate ecological health issues that may arise within the corridor Monitoring and study to inform governance and funding priorities These guiding principles were established based on the frame work for the ERSF developed by the BRAC. The Finance Committee work also established funding and governance recommendations for the ERSF that are included in Appendix D. The cost of the ERSF was identified by the BRAC as $81 million. 26 Finance Committee Final Report and Recommendations

27 Section 7.0 Establishing the Project Funding Gap Through the efforts of the Feasibility Analysis, travel demand models estimated that in 2040 the maximum traffic volume of 62,000 vehicles per day would use the road when configured as proposed by the BRAC. Using these models, forecasts were also developed to calculate the toll revenue generated by the road itself, which could be bonded against to fund the construction of the project. Assuming that the road would With a projected bonding capacity between $250 million and $330 million, the project is left with a significant funding gap. open in its entirety in 2023 and using standard industry assumptions for interest and inflation rates, the bonding capacity for the Illinois Route 53/120 project is estimated to range between $250 million to $330 million (25-year bond term, 2 to 1.5 times debt coverage respectively). A 25-year bond term and 2 times debt coverage represent standard Tollway policy. The total project cost estimate ranges from $2.35 billion to $2.65 billion (in 2020 dollars). With a projected bonding capacity between $250 million and $330 million, the project is left with a significant funding gap. The Finance Committee was tasked with developing a recommendation for how the funding gap could be closed. The Finance Committee was tasked with developing a recommendation for how the funding gap could be closed. The following sections summarize the options, research and analysis that were considered by the Committee and its working groups. Finance Committee Final Report and Recommendations 27

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29 Section 8.0 Finance Committee: Funding Options and Findings 8.1 First Understanding the Landscape: Financial Realities At the federal level, available funding for the Illinois Route 53/120 project is limited. While the U.S. Department of Transportation has allocated funding through its annual discretionary grant program, Transportation Investment Generating Economic Recovery (TIGER), the funding of the program has been unpredictable, generally limited and highly competitive. In 2014, the entire program only contained $500 million in funding for transportation projects nationwide, for all modes. At the state level, funding is also limited. The most recent state led capital program, Illinois Jobs Now! is near completion and the timing of a new capital program is currently unknown. Also, the Tollway s current capital program, Move Illinois, is fully committed to projects through Only a small portion of the overall program, $100 million, is attributed to future planning studies including Illinois Route 53/120. Lake County has made transportation infrastructure improvements a priority all around the county. The 2006 Transportation Summit developed a list of projects that comprised the Lake County State Highway Consensus Plan ( One Voice, One Transportation Future Consensus Plan). Leadership throughout the county developed this consensus list to assist in coordination with IDOT and to determine which projects or studies can be completed by the County on IDOT s behalf. However, the County does not have the existing resources or ability to participate in funding Illinois Route 53/120 without jeopardizing plans to maintain roads and bridges that meet the goals of the Transportation Summit. Recognizing that existing funding is limited at federal, state and local levels, the BRAC emphasized that a successful financial plan for the Illinois Route 53/120 project must rely on a variety of funding sources, including new revenue streams, in order to bring this project to fruition. A successful financial plan for the Illinois Route 53/120 project must rely on a variety of funding sources, including new revenue streams. Finance Committee Final Report and Recommendations 29

30 8.2 A Good Starting Point for Discussion: BRAC Proposed Funding Options The wide range of funding and financing options for the Illinois Route 53/120 project that the BRAC Report initially developed served as a solid starting point for the Finance Committee s study and discussions. These options included various tolling strategies, new county and local revenue streams and financing strategies. With regard to tolling, among other concepts, the BRAC Report included congestion pricing on Illinois Route 53/120 and the rest of the Tollway system to manage travel demand. The report stated that other tolls in Lake County could be considered, though they should be equitable and uniform. Several potential new county and local funding sources were also included in the BRAC Report. Two potential forms of value capture were suggested by the BRAC: Tax Increment Financing (TIF) and Special Service Areas (SSA). In addition, a county sales tax and a county motor fuel tax (similar to those in DuPage and McHenry Counties) were suggested as potential funding sources. Potential state contributions mentioned in the BRAC Report include land acquisition for the right-of-way and upgrades to the non-tolled portions of Illinois Route 120. The BRAC Report also recommended the pursuit of federal funds, with the caveat that federal involvement would likely eliminate the possibility of expediting the project. This in turn would negatively impact the construction costs and delay toll revenue generation. Several other options for the Illinois Tollway system were also identified, like longer term borrowing, lower cost borrowing and systemwide toll measures, including indexing of tolls. The BRAC Report did not reach a final funding recommendation for the Illinois Route 53/120 project. However, at the start of the Feasibility Analysis, the BRAC urged the Finance Committee to use the BRAC Report as the foundation for determining how to finance the project in a financially viable, fiscally sustainable, and equitable manner. This included developing a financing strategy, evaluating commitments to financing options, examining any legislative/regulatory hurdles, and developing a recommendation for the Tollway Board. 30 Finance Committee Final Report and Recommendations

31 8.3 Digging into Details: Finance Committee Working Groups In order to delve into greater detail on these ideas and issues, the Finance Committee formed working groups around concepts that were emerging as the most promising for the Committee to eventually include in its recommendations. The following sections document the analyses presented to and weighed by the working groups that form the foundation of the Finance Committee s final recommendations in Section Tolling Options along Illinois Route 53/120 Tolling options considered for the Illinois Route 53/120 project corridor included congestion pricing and indexing. These options were suggested by the BRAC as additional revenue sources beyond the base toll of 20 cents per mile. The working group also considered a higher base toll rate to determine how to maximize the revenue available for the project. These results are summarized in Table 6. Table 6: Tolling Options Considered for Illinois Route 53/120 Item No. Option Bonding Capacity 5 Congestion Pricing $99 - $128 6 Indexing $79 - $102 6A* Congestion Pricing Combined with Indexing $128 - $165 6B Toll Rate/Maximize Revenue ($0.35/mile) $79 - $102 Original concepts from the BRAC * Working group supported this item All values in million dollars (2020) Range based on 25-year bond term and debt coverage ranging from 2 to 1.5 times From this list, there was support for Item 6A, a combination of congestion pricing and indexing on the new roadway, and discussion of a pilot program for the Tollway. If deemed successful, this combination strategy could be implemented on other parts of the Tollway system. The working group dismissed further consideration of a higher base toll rate of 35 cents per mile as it was believed to be excessive. Finance Committee Final Report and Recommendations 31

32 8.3.2 Tolling Strategies along I-94 in Lake County The working group acknowledged that toll rates along I-94 in Lake County are much lower than portions of I-94 in Cook County. It was also acknowledged that a strategy of restructuring tolls along I-94 in Lake County could help close free movements that currently permit trucks to avoid the Waukegan Toll Plaza by using alternative local routes and U.S. Route 41, which is already overburdened. The working group considered many options for new tolling strategies along I-94. These are summarized in Table 7. Table 7: Tolling Strategies Considered Along I-94 in Lake County Item No. Option Bonding Capacity 12 New toll at Illinois Route 132 $70 - $90 13A New toll at Illinois Route 132 and increase toll at Waukegan Plaza $224 - $288 13B New toll at Illinois Route 132, increase toll at Waukegan Plaza and toll at state line $252 - $ New mainline toll plaza near Lake Cook Road $366 - $472 15* New mainline toll plaza near Lake Cook Road combined with revisions at Waukegan $350 - $450 Plaza and other locations 16 New tolls at Illinois Route 132, 21 and 120 $224 - $ New tolls at Illinois Route 132, 21 and 120 combined with tolling all existing untolled ramps $328 - $422 Original concepts from the BRAC * Working group supported this item All values in million dollars (2020) Range based on 25-year bond term and debt coverage ranging from 2 to 1.5 times Item 13B requires legislative action and approval From the potential I-94 tolling options, the working group members supported Item 15. This item yields the highest amount of bonding capacity and provides for more toll equity along I-94 in Lake County. Should a mainline concept prove to be not feasible, the group supported Item 17 as an alternate strategy. 32 Finance Committee Final Report and Recommendations

33 Options that included tolling at the state line were not supported due to the costly federal requirements associated with introducing tolls along an existing untolled, federally funded facility Combined Effect of Tolling Strategies for Illinois Route 53/120 and for I-94 Given that there is a segment of drivers for which Illinois Route 53/120 and I-94 are both viable alternatives, the combined effect of Item 6A along Illinois Route 53/120 and Item 15 along I-94 are not additive. The Feasibility Analysis examined these strategies in combination to more accurately understand the overall revenue impact. The estimated incremental bonding capacity for combining these options is $380 million to $510 million Financing Options Two financing options were considered - longer term borrowing and lower cost borrowing (leveraging Federal TIFIA loans) - to help maximize bonding capacity. The estimated incremental bonding capacities for each of these strategies are shown in Table 8. There was little support for either of these two options. Not only would the Toll Highway Act need to be amended to permit the Tollway to bond beyond 25 years, but extending the bonding period out to 35 years would negatively affect the Tollway s bond rating and increase the Tollway s borrowing rate. Lower cost borrowing rates were assumed to be similar to that of FHWA s TIFIA loan program. TIFIA was ultimately not recommended as it would federalize the entire project and impede the Tollway s aggressive project implementation schedule, posing cost risks not accounted for in the project cost estimate. However, the working group noted that TIFIA could be considered for stand alone off-system pieces of the Illinois Route 53/120 project to be led by another agency. Finance Committee Final Report and Recommendations 33

34 Table 8: Other Considered Financing Strategies Item No. Option Bonding Capacity 10 Longer Term Borrowing $45 - $56 (35 years) 11 Lower Cost Borrowing $45 - $70 Original concepts from the BRAC All values in million dollars (2020) Range based on 25-year bond term and debt coverage ranging from 2 to 1.5 times Lake County Motor Fuel Tax Four collar counties in northeast Illinois currently levy a local motor fuel tax: Cook, DuPage, Kane and McHenry Counties. However, Lake County does not levy such a tax. Seeing an opportunity to build on a strategy used in neighboring counties, the working group considered a four cents per gallon fuel tax as well as an indexed tax and a percentage based tax (Table 9). TABLE Table 9: LAKE 9: Lake COUNTY County MOTOR Motor FUEL TAX Fuel STRATEGIES Tax Strategies CONSIDERED Considered Item No. Option Bonding Capacity 4* Flat Fuel Tax ($0.04/gallon) $67 - $89 4A 4B Indexed Fuel Tax ($0.04/gallon indexed at 2.25% annually) Percentage Fuel Tax (1% Excise Tax on Fuel Revenue 1 ) $101 - $135 $93 - $125 1 Assumes $3.70/gallon fuel cost (2013), inflated annually at 2.25% Original concept from the BRAC * Working group supported this item All values in million dollars (2020) Range based on 20-year bond term and debt coverage ranging from 2 to 1.5 times 34 Finance Committee Final Report and Recommendations

35 The working group ultimately supported the flat motor fuel tax option and proposed that half of the revenue generated be used to fund the Illinois Route 53/120 project, while the other half would fund countywide priority road projects with the highest priority being the U.S. Route 41 corridor as identified in the Lake County Consensus Plan. Based on that revenue, the bonding capacity for the Illinois Route 53/120 project is estimated to be $34 million to $45 million, assuming a 20-year bonding term with the range based on debt coverage ratios of 2 times and 1.5 times, respectively Value Capture While the BRAC considered two forms of value capture (TIF and SSA), the Finance Committee working group s focus on value capture migrated away from either of these forms due to the uniqueness of what is intended for the Illinois Route 53/120 project. The subsequent funding mechanism considered was named by the working group as the Sustainable Transportation Fund (STF). The working group established that the STF fund would generate revenues based on 25 percent of the increased revenue from the growth in property value of new, nonresidential properties within a one mile radius of the corridor and a two-mile radius at interchanges to the Illinois Route 53/120 project. The remaining 75 percent of the increased revenue generated would flow to the underlying tax districts. As a means of garnering the needed support for this concept, the working group believed it was important to tie these revenues back to the Environmental Restoration and Stewardship Fund (Section 6.3), which would protect and enhance natural resources within two miles of the roadway. Further, it was also noted that the Environmental Restoration and Stewardship Fund needed a funding source other than toll revenues, as statutory restrictions limit the use of toll revenues. Finance Committee Final Report and Recommendations 35